Small-scale irrigation and income distribution in Ethiopia

Irrigation stimulates agricultural productivity and economic growth, but this may come at the cost of growing inequality. Using data at community and household level, this paper analyzes the distributional impacts of irrigation in Ethiopia. Regression analyses reveal the direct effects of irrigation on expenditures and labour demand, and the indirect effects of irrigation on food prices and expenditures of non-irrigation households. The results indicate that past development of irrigation stimulated growth without deepening inequality, and that irrigation decreased dependence on food-for-work programs. Thus, irrigation has played a positive role in the development of Ethiopia.